Leadership Role In Strategy Development

By M. Isi Eromosele

In many companies, leadership has deteriorated into arranging operational improvements and making deals. However, a leader’s role is more expansive and far more important.

Broad management is more than the stewardship of individual functions. The core of leadership is strategy development: defining and communicating the organization’s distinctive position, making trade-offs and building fit among the company’s activities.

A leader must offer discipline in deciding which industry changes and customer needs the company will respond to, while preventing organizational interruptions and upholding the company’s distinctiveness.

It is common that managers at lower levels of companies lack the required perspective and self-assurance to maintain a strategy. They are under steady pressure to compromise, reduce trade-offs and imitate rivals. As such, an important function of an organization’s leader is to teach others about strategic imperatives.

In implementing strategy, there are always options about what to do, as important as options about what not to do. Guidance as to setting parameters and limits is another important function of corporate leadership. Resolving which target customer segments and their needs the company should serve is fundamental to developing strategy. So is deciding not to serve other specific customers or needs and not to offer certain services.

As such, espousing strategy requires continuous discipline and transparent communication. Indeed, one of the most important functions of an open communication strategy is to steer staff in choices that result from trade-offs in their individual activities and day-to-day decisions.

Improving operational effectiveness is a necessary part of managing a company, but it is not strategy. Confusing the two has led many managers to unintentionally skew their way of thinking about their competitors, which is driving several industries toward competitive convergence, an event that is counterproductive to growth.

It is imperative that managers clearly distinguish between operational effectiveness and strategy. While both are essential to the growth of a company, they require divergent programs.

The operational program involves repeated improvements all over where there are no trade-offs. Failure to do this creates market exposure, even for companies that have a good strategy. The operational program is the appropriate place for relentless change, flexibility and perpetual efforts to achieve best practices.

Conversely, the strategic program is the correct place for the definition of a unique position, making precise trade-offs and strengthening activities fit. This involves the persistent search for ways to reinforce and extend the company’s position. The strategic program demands discipline and continuity, with little distraction and compromise.

Strategic continuity does not mean having a stagnant view of competitors. Operational effectiveness must be continually improved within a company and there needs to be a perpetual effort to expand its uniqueness while strengthening the fit among its activities.

Strategic continuity should make an organization’s continual improvement more effective. A company’s choice of a new strategic position must be driven by its ability to find new trade-offs and leverage a new system of complementary activities into sustainable competitive advantage in its marketplaces.

M. Isi Eromosele is the President | Chief Executive Officer | Executive Creative Director of Oseme Group - Oseme Creative | Oseme Consulting | Oseme Finance

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